Good morning. My name is Brent and I will be your conference facilitator. At this time, I would like to welcome everyone to the MDU Resources Group 2016 Third Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. This call will be available for replay beginning at 1:00 PM Eastern today through 11:59 PM Eastern on November 17. The conference ID number for the replay is 86987581. Again, the conference ID number for the replay is 86987581. The number to dial for the replay is 1-855-859-2056 or 1-404-537-3406. I would now like to turn the conference over to Doran Schwartz, Vice President and Chief Financial Officer of MDU Resources Group. Thank you. Mr. Schwartz. You may begin your conference.

Thank you, and welcome to our third quarter earnings release conference call. The conference call is being broadcast live to the public over the Internet and slides will accompany our remarks. If you'd like to view the slides, please go to our website at www.mdu.com and follow the link to the conference call. Our earnings release is also available on our website. During the course of this presentation, we will make certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations and beliefs are based on reasonable assumptions, actual results may differ materially. For a discussion of factors that may cause actual results to differ, refer to Item 1A, Risk Factors, in our most recent Form 10-K and Form 10-Q. Our format today will include formal remarks by Dave Goodin, President and CEO of MDU Resources, followed by a Q&A session. Other members of our management team who will be available to answer questions during the Q&A session of the conference call today are: Dave Barney, President and CEO of Knife River Corporation; Jeff Thiede, President and CEO of MDU Construction Services Group; Nicole Kivisto, President and CEO of Montana-Dakota Utilities, Great Plains Natural Gas, Cascade Natural Gas and Intermountain Gas; Martin Fritz, President and CEO of WBI Energy; and Jason Vollmer, Vice President, Chief Accounting Officer and Treasurer for MDU Resources. And with that, I'll turn the presentation over to Dave for his formal remarks. Dave?

Thank you, Doran, and good morning. We appreciate you joining us today to discuss our third quarter results. As you are already aware, we completed our exit from our Exploration and Production business and sold our interest in the Refining business back in the second quarter. This has reduced our business risk relative to commodity prices and allows us to focus on our two primary continuing business lines: Construction Materials & Services along with Regulated Energy Delivery, which is comprised of our regulated Utility and Pipeline and Midstream operations. These businesses are providing solid results. Our Construction businesses continue to experience strong momentum as the country turns more attention to needed infrastructure improvements. Our Regulated Energy Delivery businesses are focused on growth, including pipeline expansion projects along with utility system upgrades. These continuing operations delivered strong results for the third quarter. Consolidated earnings from continuing operations were $88.2 million, or $0.45 per share. This compares with $73.7 million or $0.38 per share for the third quarter of 2015. Year-to-date earnings from continuing operations were $166 million or $0.85 per share. This also compares to $120 million or $0.62 per share, an increase in earnings per share of 37% over 2015. Results for 2015 do reflect an $8.7 million after-tax impairment of some natural gas gathering assets at our Pipeline and Midstream segment. Our third quarter 2016 increase in earnings was led by the Construction Materials & Service businesses, which generated a combined $76.7 million in earnings for the quarter, up from last year's $73.5 million. Earnings at the Regulated Energy Delivery business were $6.9 million compared to a loss of $2.9 million in 2015 which, again, included the previously mentioned impairment On a GAAP basis, which includes the discontinued operations of the Exploration and Production and Refining business, we had…

Your first question comes from the line of Matt Tucker with KeyBanc Capital. Please go ahead.

Hi, good morning.

Hey, good morning, Matt.

I guess I'll just start out at the Construction Materials segment. I'm just curious; the top line was down a little bit year-over-year. Some of your peers were impacted by a pretty unfavorable weather in Texas. Curious how much that was a factor, or any other factors that may have impacted the revenue trajectory there. And also, were you helped by pricing at all in the quarter?

Yes, thanks Matt, great question. Dave Barney can't wait to talk about his record third quarter.

Hi, Matt. Good morning. Now we price our products in Construction Services based on margin over cost and that significantly lower cost resulted in lower revenues this year. Are there other parts to your question that I missed?

I was just – I was curious, if you were impacted by weather in Texas, if that was material at all.

We definitely were impacted in weather in Texas and in North Dakota and parts of Montana.

Got it. Thanks, David. And it's another one for you. You've been talking about for a while the FAST Act, and kind of really expecting that to become more of a driver in 2017 and I think we've heard a similar commentary from a lot of your peers. We're getting pretty close, obviously to 2017 so are you really starting to see those projects taking shape, I mean, how much visibility do you have on maybe some of that momentum you expect to be driven by the FAST Act? A – [0BSWMC-E Dave Barney]>: Yes, Matt. We are just starting to see the increase in DoT spending in most of our states and we contributed that to the FAST Act and we think that's going to get stronger through 2017 and beyond and I do want to remind of our $580 million backlog its 9% higher than last year. And last year was record backlog.

And I mean have you started booking projects, are the projects in the backlog that you feel like are kind of driven by the federal funding Bill? A – [0BSWMC-E Dave Barney]>: You know it's really hard to tell which jobs are from the FAST Act – they really don't say – when they put the job workout that this is a FAST Act job or just normal DoT's,- DoT job. So what we're seeing is an increased spending in most of our states and DoT work and we contributed to that to the fact.

Thanks, Dave, and maybe one on the Pipeline and Midstream side, the gathering volumes have started ticking up slightly quarter-to-quarter this year. Have we seen bottom there or kind of what are your expectations going forward?

Yes. Thanks, Matt, for the question. I'll turn it over to Martin here for a little more detail on that.

Matt, we're seeing some still – in the core counties processing plants and others coming online and so we're seeing those volumes at this point. I think folks I long ago learned not to predict prices. We're seeing some – recently a couple of rig counts pickup but that can go either way at this point, So but the thing I would come back to is over 80% to 85% of our stuff is on take-or-pay agreements, so we're not a lot very volume sensitive and the only reason that moves a little is because of our interruptible storage.

Got it. Thanks, Martin. And then I guess maybe I guess how much of a preview are you willing to give us on the roll forward of the five-year outlook? I assuming you're not going to give any numbers, but just kind of what are the key moving pieces that we should be thinking about?

Yes, Matt. We talk about – we will have a November meeting with our Board of Directors here in just a week and a half or so and we'll be bringing a refreshed five-year roll forward on our CapEx. And that's why we really emphasize how we will wrap up we believe 2016. And similar what we've done in other years on the heels of that board meeting, we would expect to provide into the market what the next five year forward looks like. And so, I don't want to get ahead of where our board meeting will be at this point in time. But I will commit that we'll be transparent into the marketplace right on the heels of that board meeting is what our roll forward will look like.

Thanks, Dave. And just last one on the Utility side. You are up nicely year-to-date kind of surprised about the lack of earnings over the past couple of quarters. Would you attribute that to regulatory lag that's going to be addressed by the rate cases you currently have pending or are there things you can do on the cost side to get the trajectory back to growth going forward?

Yes. Thanks for the question, Matt. Those are couple factors as you mentioned on year-to-date basis I think we're up pretty good, but as you look at that you also got to think about when we're implementing the rate cases a lot of the – when we disclose the amount that we've got final approval on that $45.6 million, some of that has not been fully implemented on a year-over-year basis. So, in other words, depending on when we got the implementation date, we don't have a full year effect on that. In addition to that, weather does play a factor. As you know, in the quarter here our electric volumes are off due to weather, and so you got to kind of look at the weather impact that's going on in each quarter or on a year-to-date basis. And then finally, as you do mention, as we grow the business and capital is being spent above depreciation levels, coupled with O&M, we will see some regulatory lag. And we are doing our best to put in trackers and certain mechanisms from a regulatory perspective to slow that down or to reduce that lag, but we will see that as we really only have two states, North Dakota and Minnesota, that allow fully-forecasted test periods.

Got it. Thanks, Nicole. I'll leave it there.

Thank you, Matt.

Your next question comes from the line of Roresa Mojo with D.A. Davidson. Please go ahead.

Good morning.

Hey, good morning.

So, more on Construction Materials, can you talk about just the general market activity and trends that you're seeing on a regional basis?

The question was more on a regional basis what are we seeing from a trend perspective?

Yes.

Okay. Great.

On a regional basis, most of our regions are definitely seeing improvement (27:29) scheduled out there (27:31) – mic not on. Did you hear any of that?

No. I didn't.

Okay. Sorry about that; my mic wasn't on. Like I said, we're seeing most – a big improvement – an improvement in most of our states in the DoT spending that we contribute to the DoT Act – or the FAST Act. As the economy continues, we expect our backlog to increase and our margins to follow.

Okay. Okay. And I guess, can you guys talk about – you mentioning backlog, can you talk about backlog on the Construction Service side – you guys earlier talked about the composition – and maybe any favorable mix?

You broke up a little bit there, but I think the question was, relative to Construction Services, try to give a feel or flavor for the mix in the backlog of the $518 million. Did I capture that right?

Yes. Correct, yes.

Okay.

Yes, thanks. This is Jeff. Our inside businesses – our electrical is a primary driver in our backlog, in addition to our mechanical and fire protection. But our inside businesses, and that has a lot to do in the healthcare, the mission-critical markets and where we are with our people and our processes, very confident going forward executing that backlog safely and profitably.

Right. Thank you.

Thank you for the questions.

And your next question comes from the line of Chris Ellinghaus with Williams Capital. Please go ahead.

Hi, guys. How are you?

Hey, Chris. Good morning. We're good. How are you?

I'm good. Thanks. Can you give us any color on what you're seeing in the non-public construction market?

Your question is relative to the private market?

Private construction.

Yes, Construction Services, Materials – let's start with Materials with Mr. Barney.

Hi, Chris. You know it varies by – region by region. Right now our Pacific region, which is California, Alaska, Hawaii, what we're seeing – a very strong private market, especially in that Stockton-Tracy area where we're seeing very large warehouses that we've been successful in landing quite a few of those jobs. And in our Northwest market, which is Oregon – the private side has really driven our earnings there in Oregon.

Okay. Great.

And if you look at Texas, then it's going to be more of the DOT work.

Yes, our mix there overall is about a 90%-10% public-private mix when we think about the business. But, again, Dave talked about some of the – what we're seeing in current stronger markets.

And we do more private work than public work and I would say that our strongest markets are the mission-critical and also the institutional work, healthcare. We're seeing a lot of universities still continue to expand and renovate. We're well-positioned there. In addition to renewables, we're seeing a continued strong involvement in that market as well.

Okay. Great. Can you provide any additional color on what the continuing trend seems to be in the equipment sales and rentals?

Yes. This is Jeff again. So right now we've experienced a slower period with our customers on our equipment rental sales. We're well-positioned in that market as well. We've increased our manufacturing capabilities. We're starting to see more activity, bidding activity. We're very close to our customers. And we've got a strong line of equipment we think the strongest in the industry. And so we will continue to see improvements as the market improves.

Okay. Great. Thanks for the color, guys. See you soon.

Yes. Thanks, Chris.

This call will be available for replay beginning at 1:00 PM Eastern today till 11:59 PM Eastern on November 17. The conference ID number for the replay is 86987581. Again, the conference ID number for the replay is 86987581. And at this time there are no further questions. I'd now like to turn the conference back over to management for closing remarks.

Thank you, operator. As noted earlier, our continuing operations delivered strong results for the third quarter of 2016. We're committed to continuing building on this momentum by focusing on the factors that we can most directly influence, those being controlling costs, expanding margins and growing earnings. We, again, appreciate your participation on the call today and we thank you for your continued interest in MDU Resources. Thanks, again, for participating, and with that, I'll turn it back to the operator.

Thank you. This concludes today's MDU Resources Group conference call. Thank you for your participation. You may now disconnect.